Oracle Stock Dips Following Q2 Earnings Miss
Austin, Tuesday, 10 December 2024.
Oracle’s Q2 2025 report shows sales and earnings below expectations, causing a 7% drop in stock value amid concerns about cloud business growth.
Earnings Fall Short of Expectations
Oracle Corporation (NYSE: ORCL) reported disappointing second-quarter results for fiscal 2025 on December 9, 2024, with adjusted earnings of $1.47 per share, falling short of the expected $1.48 [1]. Total revenue came in at $14.06 billion, missing analyst projections of $14.1 billion [1][2]. The news triggered a significant market response, with Oracle shares dropping 7% in extended trading [1].
Cloud Business Shows Mixed Performance
Despite missing overall targets, Oracle’s cloud infrastructure segment demonstrated strong growth, with revenue soaring 52% to $2.4 billion [2][5]. Total cloud revenue, including Infrastructure as a Service (IaaS) and Software as a Service (SaaS), reached $5.9 billion, marking a 24% increase year-over-year [2]. CEO Safra Catz attributed this growth to ‘record level AI demand,’ noting that GPU consumption surged by 336% during the quarter [2].
Future Outlook Raises Concerns
Adding to investor concerns, Oracle’s forecast for the current quarter fell below market expectations. The company projects revenue growth of 7% to 9%, suggesting approximately $14.3 billion in revenue, which falls short of analysts’ expectations of $14.65 billion [1]. However, the company maintains a positive long-term outlook, with total Oracle Cloud revenue expected to exceed $25 billion this fiscal year [2][5].
Strategic AI Partnerships
Oracle continues to strengthen its position in the AI infrastructure market, recently signing a significant agreement with Meta for infrastructure support on their Llama family of large language models [1]. The company’s chairman, Larry Ellison, emphasized Oracle’s competitive advantage, stating that Oracle Cloud Infrastructure trains several of the world’s most important generative AI models due to superior speed and cost-effectiveness [2][5].